Why did my return drop so much after entering in 1099?

[clapotax]

Hello,
My gross income was $80 K. My return was going to be $3,600. After entering in a 1099 for $4,000. My return went down to $1900.
Why am I paying nearly 50% tax on $4000 extra from a 1099?
Thanks for your time,

[VolvoGirl]

What kind of 1099?  Is it a 1099Misc?  That is self employment income.

Self Employment tax (Scheduled SE) is automatically generated if a person has $400 or more of net profit from self-employment.  You pay 15.3% SE tax on 92.35% of your Net Profit greater than $400.  The 15.3% self employed SE Tax is to pay both the employer part and employee part of Social Security and Medicare.  So you get social security credit for it when you retire.  You do get to take off the 50% ER portion of the SE tax as an adjustment on line 27 of the 1040.  The SE tax is already included in your tax due or reduced your refund.  It is on the 1040 line 57.  The SE tax is in addition to your regular income tax on the net profit.

[clapotax]

Thanks for this response. I am doing this through turbo tax, not sure how to deduct the 50% ER portion as I am not filling out a 1040.
Again, thanks for taking the time to respond to this,
Most appreciatively,
S.

[VolvoGirl]

It does it automatically.  And when you fill out a schedule C it switches you to the full 1040.  Or what do you mean you are not filling out a 1 040?

[clapotax]

Ok thanks, I think I understand.  So just to recap. My total income of 80,000 had a $3600 return coming. When I added in my $3900 from 1099 MISC my return dropped to $1800.  So essentially, I owe $1800 in taxes on $3900 of income? Is that correct? So 47% tax?
Didn't think I was in that tax bracket.
That would mean off my $80K I only take home about $44k?
Thanks for your patience, first time with the 1099 stuff.
Have a great day!

[jerry2000 · Accepted solution]

That is an easy one to answer. On 1099-MISC, self-employment income, you have to pay Self-employment tax of 15.3% in addition to ordinary income tax at whatever your marginal tax rate is. So if your marginal ordinary tax rate is 25% add the 15.3% of SE tax, and you pay 40%+ on the 1099 income.